Diodes D5 and D6 make up a poor man's zener diode and the voltage between ground and the point where the diode connects to R4 should read -1.4, give or take. Black wire of you meter goes on ground. This negative voltage is what allows the regulator to get down to 0V.
I don't know the AC voltage between the blue and yellow wires of the transformer but about 1.4 times that value should be measured at pin 3 of the LM317 as a DC voltage.
Pin 1 of the LM317 should move between some negative value, like -1.4V, up to some positive value, nearly 15V, but I haven't calculated the exact range.